OK let me explain my reasoning on this to ya because I don't really mean to be an ass to you Chuck.

The phones value new is about 300-400 bucks.

Grand theft begins at 300.

Finding a phone is one thing but when a person attempts to modify it so that they may retain ownership of it then it becomes theft by deception or just plain grand theft. By you aiding him in this venture you become complicite in the theft of said item and therefore yourself are aiding in the commission of a felony.

Not telling you what to do but I am sure if it were your phone you would hope someone did the right thing and returned it to AT&T so you might get it back.